Flextronics to buy DisplayWorks for $300 mln

bbj.hu

Wednesday, September 6, 2006, 09:56

Flextronics International Ltd., the largest custom-made electronics company, agreed to buy International DisplayWorks Inc. for about $300 million in stock to add liquid crystal displays for cell phones and MP3 players. Flextronics will swap shares for International DisplayWorks stock based on a price of $6.55, using a 10% collar to keep the price within its estimated value, the Singapore-based company said today in a statement. That's a 10% premium over DisplayWorks' Sept. 1 closing share price of $5.95.

The acquisition furthers CEO Michael McNamara's strategy of focusing on his main business of making electronics for other companies. Singapore-based Flextronics last year sold semiconductor and network services businesses and said that it completed the sale of its $900 million software development unit. The deals helped widen Q1 profit by 44% to $84.5 million. Flextronics stock, up 12% this year, slipped 5 cents to $11.72 at 4:01 p.m. New York time in Nasdaq Stock Market composite trading. Shares of International DisplayWorks gained 26 cents to $6.21. The acquisition price may be adjusted depending on share movements, Flextronics said. The agreement is subject to approval by International DisplayWorks investors and regulatory bodies. It is expected to close by the end of December, Flextronics said.

International DisplayWorks is based in Roseville, California, and runs manufacturing sites in China. The company also has sales offices in the US, Europe (Hungary), Hong Kong, Singapore and China. Deutsche Bank Securities Inc., a unit of Deutsche Bank AG, was financial adviser to International DisplayWorks. Flextronics said it retained a 15% stake in the software development business, which was sold to an affiliate of Kohlberg Kravis Roberts & CO. and Sequoia Capital in a transaction that values the unit at about $900 million. Flextronics said Ash Bhardwaj remains chief executive of the unit, with operations in Bangalore. (Bloomberg)

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